B-135762, JUL. 21, 1960

B-135762, JUL. 21, 1960

TO THE CENTRAL OF GEORGIA RAILWAY COMPANY: REFERENCE IS MADE TO YOUR LETTER OF JULY 8, 1960, FILE N-38369-G-A, REQUESTING RECONSIDERATION OF OUR DECISION OF SEPTEMBER 25, 1958, B-135762, WHICH SUSTAINED THE DISALLOWANCE OF YOUR CLAIM FOR ADDITIONAL FREIGHT ON THE SHIPMENT MOVING FROM MEMPHIS, TENNESSEE, TO SAVANNAH, GEORGIA, UNDER BILL OF LADING DA-TPS -703040.

IN REASSERTING YOUR CLAIM FOR PAYMENT BASED ON THE USE OF FULL COMMERCIAL RATES, YOU NOW CONTEND THAT SINCE THE COMMODITY WAS SHIPPED AND UNDER THE CONTROL OF THE "F.E.A., " IT WAS STRICTLY CIVIL IN NATURE.

THE FOREIGN ECONOMIC ADMINISTRATION WAS ESTABLISHED WITHIN THE OFFICE OF EMERGENCY MANAGEMENT BY EXECUTIVE ORDER 9380, DATED SEPTEMBER 25, 1943, 8 F.R. 13081, TO UNIFY AND CONSOLIDATE THE GOVERNMENTAL ACTIVITIES RELATING TO FOREIGN ECONOMIC AFFAIRS. IN ADDITION TO THE OFFICE OF FOREIGN RELIEF AND REHABILITATION OPERATIONS AND THE OFFICES OF ECONOMIC WARFARE AND COORDINATION, THE ORDER ALSO TRANSFERRED TO THE FOREIGN ECONOMIC ADMINISTRATION THE OFFICE OF LEND LEASE ADMINISTRATION, WHICH WAS ESTABLISHED BY EXECUTIVE ORDER 8926, DATED OCTOBER 28, 1941, FOR THE PURPOSE OF ADMINISTERING THE ACT OF MARCH 11, 1941, ENTITLED AN ACT TO PROMOTE THE DEFENSE OF THE UNITED STATES (55 STAT. 31; 22 U.S.C. 411-19), KNOWN GENERALLY AS THE LEND LEASE ACT. THE FACT THAT THIS MATERIAL WAS SHIPPED BY OR UNDER THE CONTROL OF THE FOREIGN ECONOMIC ADMINISTRATION IS NEITHER DETERMINATIVE NOR INDICATIVE OF ITS CIVIL OR MILITARY NATURE.

THIS POINT WAS SPECIFICALLY CONSIDERED BY THE UNITED STATES SUPREME COURT IN NORTHERN PACIFIC RAILWAY CO. V. UNITED STATES, 330 U.S. 248, 252 AND 253, WHERE THE COURT STATED:

"THERE IS A SUGGESTION THAT SINCE THE SHIPMENT OF ASPHALT WAS TO A CIVILIAN AGENCY, THE CIVIL AERONAUTICS AUTHORITY, IT WAS NOT "MILITARY OR NAVAL" PROPERTY. THE THEORY IS THAT "MILITARY OR NAVAL" PROPERTY MEANS ONLY PROPERTY SHIPPED BY OR UNDER CONTROL OF THE ARMY OR NAVY.

"WE SEE NO MERIT IN THAT SUGGESTION. * * * THE FACT THAT THE WAR OR NAVY DEPARTMENT DOES THE PROCUREMENT MIGHT, OF COURSE, CARRY SPECIAL WEIGHT OR BE DECISIVE IN CLOSE CASES. BUT IT IS WELL KNOWN THAT PROCUREMENT OF MILITARY SUPPLIES OR WAR MATERIAL IS OFTEN HANDLED BY AGENCIES OTHER THAN THE WAR AND NAVY DEPARTMENTS. * * * AS WE HAVE HELD IN UNITED STATES V. POWELL, SUPRA, (330 U.S. 238) NOT EVERY PURCHASE WHICH FURTHERS THE NATIONAL DEFENSE IS FOR "MILITARY OR NAVAL" USE WITHIN THE MEANING OF 321 (A). BUT PROPERTY MAY FALL WITHIN THAT CATEGORY THOUGH IT IS PROCURED BY DEPARTMENTS OTHER THAN WAR OR NAVY.'

IT IS THE USE INTENDED AT THE TIME THE SHIPMENTS MOVED THAT IS THE CONTROLLING FACTOR IN DETERMINING THE MILITARY OR CIVIL CHARACTERIZATION OF THE COMMODITY. NORTHERN PACIFIC RY.CO. V. UNITED STATES, 101 F.SUPP. 29, 31; PENNSYLVANIA R.CO. V. UNITED STATES, 125 F.SUPP. 233, 237.

ACCORDINGLY AND SINCE THE FREIGHT CHARGES AS NOW PAID ARE CONSISTENT WITH THE INTENDED USES INDICATED ON THE REQUISITION UNDER WHICH THE MATERIAL SHIPPED WAS PROCURED, WE MUST ADHERE TO OUR PRIOR DECISION.